World's oil investors now factoring in price increases
The chance of an agreement to freeze or cut crude output when Opec members meet next month might appear more distant now Iraq has joined those asking for an exemption, but investors are ramping up their bets that oil prices will rally.
The price of oil has this month risen to its highest so far this year, having gained more than 10pc in the four weeks since the Organization of the Petroleum Exporting Countries agreed to cut production and rein excess global supply.
Since the decision at a meeting in the Algerian capital, Algiers, on September 28, at which Opec said it would seek to cut output to output to a range of 32.5-33.0 million barrels per day, from its current estimate of 33.24 million bpd.
Although there are questions hanging over how much each country will cut and whether all countries will agree to it, investors have raised their bets in both futures and options at breakneck speed that oil prices will continue to rise.
Data from the US Commodity Futures Trading Commission (CFTC) and the InterContinental Exchange shows money managers have added to their bets on a rising crude price at the fastest monthly pace on record in October.
Fund managers have bought nearly 218,000 lots of crude futures and options contracts in October alone.
That's the largest monthly rise to date as investors have taken heart from falling oil stockpiles.
"While much of the oil market paints a picture of a commodity struggling under the weight of a huge surplus, statistical balances suggest that conditions have improved markedly," Barclays commodities analyst Kevin Norrish said in a note.